Yesterday, we brought you the troubling tale of AT&T offering 768Kbps Internet for $20 a month (but the fee was actually more than $20 once you read the fine print).

Today, let's shine a light on the flip side—a deal so good you're going to be jealous of the few people who actually get to buy it. In a small part of Vermont, thanks to an ambitious local telco and $116 million in federal funds, residents can buy gigabit Internet and phone service for prices starting at $48 a month.

Gigabit Internet is ever so slowly inching its way through the US, but typically it costs a bit more than what these Vermont residents are paying. If you're one of the very lucky people who live in a city with Google Fiber, you're paying $70 a month for gigabit Internet or $120 per month for gigabit Internet and TV service. It's a fair price based on the market—Sonic.net has gigabit Internet for $70 in parts of California, and the new gigabit Seattle costs $80 per month.

The best deal we've heard of can be found in Hong Kong, where gigabit-speed fiber to the home was being offered for just $26 a month, according to a New York Times report in 2011. But in the US, we haven't seen anyone beat Vermont Telephone (VTel).

Quick, everyone move to Vermont!

VTel is selling gigabit Internet for $29.95 or $34.95 per month, with no up-front installation fees. The service must be bought along with a landline telephone plan, putting the price range at $48 to $70 a month for gigabit Internet and phone service. A triple play package including TV costs $95 a month.

VTel started deploying construction crews to roll out gigabit-speed fiber to its 17,500 customers about four months ago, and has about 10 percent of them hooked up so far (the non-gigabit customers get up to 24Mbps over DSL). All 17,500 should have gigabit fiber within the next year—but it took a lot of help from the federal government in the form of an $81 million broadband stimulus grant and a $35 million loan. That money, from the American Recovery and Reinvestment Act, is for both the gigabit Internet rollout and a statewide cellular deployment.

This sort of thing doesn't happen in every rural part of the US, obviously. Even the CEO of VTel isn't sure whether companies of VTel's size can prosper nationwide in the face of competition from the likes of Comcast. VTel is based in Springfield, a town of just over 9,000 people.

"There's nobody better able to survive than us [among small telcos]," said VTel owner and CEO Michel Guité, who bought the company in 1994. "But it just may be so that there's no room for anybody small left in America."

The gigabit fiber is limited to VTel's telephone service area, about 18,000 homes and businesses, Guité said. VTel obtains capacity from Cogent Communications in Boston and New York, as well as Hurricane Electric in New York. So far, VTel is using less than 24Gbps, but usage is rising rapidly, and the company has plenty of capacity to handle that growth.

The federal funding allowed VTel to build 100Gbps data paths between Montreal, Boston, and New York. "We have multiple hundred gig pipes to Boston, New York, and Montreal, with Vermont in the middle," Guité told Ars.

The fibers aren't exclusively for VTel's rural customers. "A large university in Cambridge, MA, uses two more of our fibers from Albany to New York City, with multiple hundred gig being discussed," Guité said. "We have only one hundred gig pathway lit on two more of these VTel fibers, for our own VTel use. … We are talking to several others about offering this same hundred gig capacity on our VTel fibers."

VTel is also using its federal funding to deploy 4G LTE cellular service throughout the state, using the same fiber capacity to provide backhaul to its wireless towers. "The first towers are now operating and we're trying to turn on about 150 by year-end," Guité said.

VTel owns spectrum in the B and C blocks of the 700MHz band, as well as in the Advanced Wireless Services, Broadband Radio Service, and Personal Communications Service bands. The company has an LTE roaming agreement with AT&T so customers can stay connected when they're outside Vermont. Wireless service is expected to launch at the end of the year.

Buying capacity, trading fiber

VTel pays an average of about $1.60 to its backhaul providers for each megabit per second of capacity. The rate would be higher, but VTel is able to lower the average by trading dark (i.e., unused) fiber connecting Montreal and New York to Cogent in exchange for capacity.

Customers pay a minimum of $29.95 a month for gigabit service, but to get that price they also need to sign up for VTel's "PlainTalk" and long distance phone service—bringing the total monthly price to $70. The least a VTel customer can pay for gigabit Internet ends up being $48, through a $34.95 monthly plan that requires a basic phone service charge of $13 per month, Guité said.

VTel could theoretically sell gigabit service alone, but it prefers customers to buy phone service so it can tap into federal money for rural providers through the Universal Service Fund. "It's way better for us when they take voice with it because it puts it into these federal subsidized pools," Guité said.

As mentioned, VTel also offers a package including TV for $95 a month. "I don't want people saying 'I just want Internet and none of your other services'—we want to encourage them to take the whole suite of services," he said.

The price is guaranteed for the first year, and Guité said VTel generally doesn't raise prices much if at all. VTel does have competition in its service area from Comcast. "Our goal is to be about 15 percent cheaper than Comcast under all circumstances, no matter what," he said. "We've got Comcast going door to door, knocking two or three times on every door, saying 'sign up for Comcast' and making wonderful offers."

Comcast offers speeds of up to 105Mbps down and 20Mbps up in VTel's territory. When I checked prices on Comcast's website for Springfield, Vt., the 105/20 service cost $79.99 monthly for the first six months, with a "special offer" for customers who also subscribe to either Xfinity Digital TV or Voice. Speeds of 50Mbps down and 10Mbps up cost $34.99 a month for the first six months, also requiring a TV or Voice plan. Triple play deals for Comcast ranged from $142 to $240.

VTel's testing in customers' homes shows that its gigabit customers typically get between 925 and 950Mbps for both downloads and uploads, Guité said. VTel buys the same Actiontec modems and routers used by Google Fiber.

"They were building these for Google and we said 'why don't you sell to us?" Guité said. "They were lovely to deal with. Google helped get them built, and brought the price down."

Why don't customers get a full gigabit? VTel CTO Justin Robinson notes that "there are a lot of factors that will affect throughput speed—especially as you get near 1Gbps rates." A PC's Ethernet port or motherboard architecture could limit throughput, as can a firewall, he said.

"The size of the packets that are being sent/received can increase overhead (more smaller packets essentially add more overhead, and reduce the amount of actual useful throughput you can receive)," Robinson wrote in an e-mail to Ars. "The type of packets you are sending can also impact throughput. TCP, a commonly used protocol, has a lot of built-in protections to be sure that data you send is received. These protections cause receive acknowledgements to be sent, and in the case of lost packets, will allow for retransmission of the data. While this has the benefit of overcoming dropped packets, or loss of data out in the Internet, it also has the effect of reducing available throughput. UDP, another commonly used protocol, is more efficient in throughput, but does not contain a lot of the redundancy advantages that TCP has for transmission. There are many other protocols available, but which protocol is used is decided on a per-application basis, and is not something that the underlying service provider, like us, controls."

“Unlimited” data, unless someone really goes overboard

Guité said VTel offers unlimited data to customers. The company does reserve the right to limit individual customers' data if they use a ludicrous amount, but Guité said, "we've never declared anybody over their limit in the last 10 years."

There is one customer who somehow downloads 3TB a month, Guité said, but VTel still has enough capacity that it doesn't have to impose any specific limits. "There's probably no more than 3 or 4 percent of people who use a huge amount, [and] because we have so much capacity we're happy when they do use a huge amount," he said.

(Edit: As one reader points out, the VTel website states that there is a limit on data. "All access accounts come with a 500GB monthly maximum allotted transfer," the site says. "Additional usage billed in increments of 1GB." Guité told us that despite what the website says, VTel has never penalized customers for using too much data—even the guy downloading 3TB a month. "We stopped telling people they were 'over' about 18 years ago, when the average was about 4GB and some people were at 15+," Guité said.)

Guité worries about the future of small businesses like his own, particularly those serving areas even more rural than VTel's service area. The costs of deploying phone service to sparsely populated areas can vastly exceed the fees customers pay, and recent changes to the Universal Service Fund can reduce subsidies to phone companies, he said.

Promoted Comments

I've been a VTel customer since I bought my house in 2001. They were the first company in SE Vermont to offer DSL. They regularly bumped DSL speeds as they upgraded infrastructure. They replace modems when lighting strikes damage them. It is easy to get a real person on the phone and not get lost in a phone tree.

Even if they *weren't* offering Gigabit fiber, I'd be a happy customer. That they are is just icing on the cake. AT&T, Comcast, and Verizon could learn a lot about customer support and service from VTel.

I'm not saying I wouldn't like something better than the 25mb/s connection that I have at home, and I could probably figure out some cool VPN/remote desktop/streaming solutions if I had a gigabit connection, but for most people a connection that fast would either be lost on them or it would mean they could download movie torrents much more quickly.

I think this is largely due to the fact that consumer oriented products and services are designed to work within the limitations of slow WAN speed out of necessity. If you were designing a product or service that you knew was only going to be deployed on a gigabit LAN, there's a lot you could do that just isn't possible if you have to make it work over today's typical home Internet service. I think once gigabit Internet service becomes common, we'll start to see more consumer oriented services that can actually take advantage of it. For example, a home router with easy to configure VPN service and a USB3 or SATA port to plug in a hard drive could be a nice remotely accessible storage solution for people who didn't want to bother with a full NAS, but want all their data available wherever they are without having to pay for terabytes of cloud storage space.

93 Reader Comments

Yeah, while its nice, its really not sustainable. The only possible reason this is remotely possible is due to the subsidies. While nice in principle to help some of these people, I really don't think its the most efficient way to go about it (not that the alternatives subsidies currently going on are better mind you).

Edit: Quick numbers: 116 million over its 17500 customer base is $6.6k per customer which at $48 per month is 11.5 yrs just in subsidy. If you apply a profit margin of 20%, which is not too bad of a value, that's almost 60 yrs to recoup the subsidy alone.

I'd use it for remote backup and replication, for one. If my workplace had 1gbps connections at each office, it would beat the crap out of the cable connections we use now, which cap our VPN with their 2mbps upload speeds on each end.

It would also make remote desktop a pleasant experience, though that would be more due to the lower latency that tends to come with these connections. Right now, from one Comcast connection to another across town, I get 20-30ms pings. From what I've seen from Google Fiber users, their pings are notably lower than that.

I'm not jealous, I'm pissed. Why are we paying an outrageous sum of money for people in Vermont to have excellent connectivity when there are so many problems the federal government is supposed to be addressing but doesn't?

I know I'm gonna get jumped all over for this, but I just can't figure out what I would do with even 50mbps of residential bandwidth much less 1gbps.

Do that is legal, I suppose I should add.

That's the beauty of choice, I suppose. Those of us that can see a use can get the gigabit internet, and others can choose a lower tier.

As others have started to point out, however, the "new thing" on the video front is the 2k/4k push. That'll eat up some bandwidth, especially if a family lives there and multiple users are downloading different things. However, I'd also like to see video companies start to include 5.1 or 7.1 in those streams. As I understand it, that'll eat up bandwidth by itself.

I can tell a ton of people here have big issues with the government subsidies for rural areas, but I think this is thousands of times better then the inefficiencies in some cases.

Despite the fact that providing fiber to rural areas is hugely inefficient, I think that it's far better to have a program like this that provides a fair bit of futureproofing as opposed to AT&Ts program.

So those of us in populous areas with crappy broadband are paying telecom taxes so the federal government can give that money to a rural provider who gives their customers super fast broadband for way less than it actually costs because those of us with crappy broadband are subsidizing it. Not really a sustainable model for the country as a whole.

I know I'm gonna get jumped all over for this, but I just can't figure out what I would do with even 50mbps of residential bandwidth much less 1gbps.

Do that is legal, I suppose I should add.

It's the upload, which is notoriously low for a lot of us mere mortals. You could livestream all manner of mundane activities. Or do quick and easy cloud backups of your awesome, 100%-legal homemade cat videos. In HD.

I can tell a ton of people here have big issues with the government subsidies for rural areas, but I think this is thousands of times better then the inefficiencies in some cases.

Despite the fact that providing fiber to rural areas is hugely inefficient, I think that it's far better to have a program like this that provides a fair bit of futureproofing as opposed to AT&Ts program.

The problem with this program, is it relies on the idea that the subsidies are going to keep rolling in.

AT&T/Comcast/Google/etc would still be able to provide service without subsidies. Would V-Tel?

Comcast will most likely be rolling out 1Gbps anyways due to competition from Google and will be able to do so without subsidy.

I know I'm gonna get jumped all over for this, but I just can't figure out what I would do with even 50mbps of residential bandwidth much less 1gbps.

Um, the same things we do on LANs. For some reason, even on a heavily tech oriented site like Ars, a lot of people seem to forget that they already typically use 100 Mbps to 1 Gbps all the time, both at home and at work. It gets used for everything from fast collaboration to backups to video streaming to thin interface computers. Right now it's just that there is typically a big bottleneck from one LAN to another LAN in the form of the WAN (usually Internet) link, but if that wasn't there huge numbers of applications would instantly and trivially be possible purely as a matter of extending what is done on LANs anyway. The only core difference that must exist is latency, but that too either is irrelevant for many applications or would be so low it wouldn't matter.

We've gotten used to a lot of hacks to deal with the basic bottleneck, but if it went away then in turn a lot of those would go away or be less necessary. Lots of new offerings, or more effective use of existing ones, could come into existence (like general deployment of managed thin systems). FWIW, one of the potentially significant implications is that there's also an anonymity angle: a main practical issue with anonymization systems like Tor is that they impose significant overhead for all network operations. However, if the baseline speed was far higher then even a huge speed hit would still be acceptable. Say using some such system imposed a speed hit of 95%: on a 1.5 Mbps ADSL link, that'd drop things to a crawling 75 Kbps. But on a gigabit link, even a 95% speed hit would still mean 50 Mbps. That could have a dramatic impact on the cost/benefit equation in terms of privacy, something I haven't really seen discussed much.

So those of us in populous areas with crappy broadband are paying telecom taxes so the federal government can give that money to a rural provider who gives their customers super fast broadband for way less than it actually costs because those of us with crappy broadband are subsidizing it. Not really a sustainable model for the country as a whole.

Not their fault the big telecoms too this money and are wasting it. They took the stimulus money and used it for what it was intended, to bring faster access to people. The 100Gbps trunks they laid down are also important as they connect high traffic areas and make the Internet in general faster (if you are accessing a web server in the north east coast, or live in that area).

So those of us in populous areas with crappy broadband are paying telecom taxes so the federal government can give that money to a rural provider who gives their customers super fast broadband for way less than it actually costs because those of us with crappy broadband are subsidizing it. Not really a sustainable model for the country as a whole.

Not their fault the big telecoms too this money and are wasting it. They took the stimulus money and used it for what it was intended, to bring faster access to people. The 100Gbps trunks they laid down are also important as they connect high traffic areas and make the Internet in general faster (if you are accessing a web server in the north east coast, or live in that area).

It's easy to provide fast service when you have the ability to cherry pick small profitable suburbs/metros. This subsidy doesn't even come close to paying for fiber on a large scale.

Um, the same things we do on LANs. For some reason, even on a heavily tech oriented site like Ars, a lot of people seem to forget that they already typically use 100 Mbps to 1 Gbps all the time, both at home and at work. It gets used for everything from fast collaboration to backups to video streaming to thin interface computers.

For most people, most of the time, that much speed really isn't necessary right now.- Thin clients are essentially non-existent for home use- Backups take a while the first time, but each incremental daily backup is a very small amount of data. Even a couple GB per day doesn't matter if it's getting backed up at 3:00am- It would be great to stream Blu-Ray images at their full ~50mb/sec, but I'm not aware of any consumer-grade (ODEMAX doesn't count) service that can provide anything remotely close to that. So for now, 1gb/sec doesn't matter one bit for video until the providers start upping the quality dramatically- And I don't even know what "fast collaboration" means.

I'm not saying I wouldn't like something better than the 25mb/s connection that I have at home, and I could probably figure out some cool VPN/remote desktop/streaming solutions if I had a gigabit connection, but for most people a connection that fast would either be lost on them or it would mean they could download movie torrents much more quickly.

I'm not sure your correct here. While washouts and such could occasionally happen, in general fiber is not something that wears our and stops working after a couple of years (quite the contrary in fact). Information transmission is critical basic physical infrastructure, and something that it makes a lot of sense to have the government involved in. Taking Vermont as a data point, in FY 2011 (according to the VT Agency of Transportation site) expenditures were $547 million, of which 68.6% ($375.2 million) was directed towards bridges and roads (and most of that was just for ongoing maintenance). Keep in mind that, like most of America, that's under budgeting: the percent of the network in "very poor" condition is now at 24%, with another 16% in "poor" condition. There are 275 bridges and structures over 90 years old, and 2784 that are over 40 years old. According to VTrans, "a wave of structures in need of major investment is quickly approaching."

In comparison, fiber, like power, has both lower capital costs and vastly lower maintenance costs. The bang for the buck looks pretty decent frankly, and if it was done for denser areas and in much larger way so we could benefit from far larger economies of scale it'd be even better.

Quote:

The only possible reason this is remotely possible is due to the subsidies. While nice in principle to help some of these people, I really don't think its the most efficient way to go about it (not that the alternatives subsidies currently going on are better mind you).

When you say subsidies, are arguing that all infrastructure should be entirely private, including roads, water, sewer, and power?

Quote:

Edit: Quick numbers: 116 million over its 17500 customer base is $6.6k per customer which at $48 per month is 11.5 yrs just in subsidy. If you apply a profit margin of 20%, which is not too bad of a value, that's almost 60 yrs to recoup the subsidy alone.

It's very important though to recognize that it's not as if they all gathered around and decided on the most efficient roll out plan either. In a higher density area, it'd be far more efficient and cheaper per customer. In fact, due to the perverse incentives of America's captured regulatory systems, we're seeing something like the opposite: the only places that go for it are those that are so out of the way and rural that there's no entrenched monopoly interested in putting up a huge fight over it (and simultaneously it's harder to do so being more local). We're seeing more of a worst-case rather then a best-case here, and it still doesn't look awful compared to other infrastructure even if we ignore any second-order or higher economic benefits.

So those of us in populous areas with crappy broadband are paying telecom taxes so the federal government can give that money to a rural provider who gives their customers super fast broadband for way less than it actually costs because those of us with crappy broadband are subsidizing it. Not really a sustainable model for the country as a whole.

Not their fault the big telecoms too this money and are wasting it. They took the stimulus money and used it for what it was intended, to bring faster access to people. The 100Gbps trunks they laid down are also important as they connect high traffic areas and make the Internet in general faster (if you are accessing a web server in the north east coast, or live in that area).

It's easy to provide fast service when you have the ability to cherry pick small profitable suburbs/metros. This subsidy doesn't even come close to paying for fiber on a large scale.

I have to assume you're never been to southern vermont. Suburbs? Metros? Not really. Their footprint is rural. Hugely profitable in a sparsely populated state with a per capita income around $30k? Ok...

So those of us in populous areas with crappy broadband are paying telecom taxes so the federal government can give that money to a rural provider who gives their customers super fast broadband for way less than it actually costs because those of us with crappy broadband are subsidizing it. Not really a sustainable model for the country as a whole.

Not their fault the big telecoms too this money and are wasting it. They took the stimulus money and used it for what it was intended, to bring faster access to people. The 100Gbps trunks they laid down are also important as they connect high traffic areas and make the Internet in general faster (if you are accessing a web server in the north east coast, or live in that area).

Notice also that Comcast offers 105/20 in this area. 105/20 would never, ever happen here -- and this isn't a particularly underserved area compared to many. It's only happening there because of competition like this.

So those of us in populous areas with crappy broadband are paying telecom taxes so the federal government can give that money to a rural provider who gives their customers super fast broadband for way less than it actually costs because those of us with crappy broadband are subsidizing it. Not really a sustainable model for the country as a whole.

Not their fault the big telecoms too this money and are wasting it. They took the stimulus money and used it for what it was intended, to bring faster access to people. The 100Gbps trunks they laid down are also important as they connect high traffic areas and make the Internet in general faster (if you are accessing a web server in the north east coast, or live in that area).

It's easy to provide fast service when you have the ability to cherry pick small profitable suburbs/metros. This subsidy doesn't even come close to paying for fiber on a large scale.

So those of us in populous areas with crappy broadband are paying telecom taxes so the federal government can give that money to a rural provider who gives their customers super fast broadband for way less than it actually costs because those of us with crappy broadband are subsidizing it. Not really a sustainable model for the country as a whole.

Not their fault the big telecoms too this money and are wasting it. They took the stimulus money and used it for what it was intended, to bring faster access to people. The 100Gbps trunks they laid down are also important as they connect high traffic areas and make the Internet in general faster (if you are accessing a web server in the north east coast, or live in that area).

It's still not a sustainable way to increase broadband speeds throughout the country. There's only so much of this stimulus money out there and it hardly sounds like this area was some destitute rural area with no high speed options if comcast is there and offers speeds up to 100 Mbps.

If the 100 Gbps trunks were needed that bad then why can't private industry pay for them? I'm just not understanding why people who are stuck paying $60 a month for 15 Mbps internet are stuck subsidizing lucky communities who get to pay half of that for a speed 60 times faster. That price is only possible because those customers are getting back WAY more than they pay in taxes. At the end of the day the average US customer is no better off because the money can only pay for a small percentage of citizens to get this crazy upgrade.

So those of us in populous areas with crappy broadband are paying telecom taxes so the federal government can give that money to a rural provider who gives their customers super fast broadband for way less than it actually costs because those of us with crappy broadband are subsidizing it. Not really a sustainable model for the country as a whole.

Not their fault the big telecoms too this money and are wasting it. They took the stimulus money and used it for what it was intended, to bring faster access to people. The 100Gbps trunks they laid down are also important as they connect high traffic areas and make the Internet in general faster (if you are accessing a web server in the north east coast, or live in that area).

It's still not a sustainable way to increase broadband speeds throughout the country. There's only so much of this stimulus money out there and it hardly sounds like this area was some destitute rural area with no high speed options if comcast is there and offers speeds up to 100 Mbps.

If the 100 Gbps trunks were needed that bad then why can't private industry pay for them? I'm just not understanding why people who are stuck paying $60 a month for 15 Mbps internet are stuck subsidizing lucky communities who get to pay half of that for a speed 60 times faster. That price is only possible because those customers are getting back WAY more than they pay in taxes. At the end of the day the average US customer is no better off because the money can only pay for a small percentage of citizens to get this crazy upgrade.

I'll point you to my quote above yours, but also elaborate on it:

Private industry has an interest to maintain a profit margin above a certain percentage. R&D, Maintenance, and New Infrastructure costs eat into that margin. Ergo, your private industry has less incentive to do any of these things with the subsidy money they're given by the government.

Living in VT I'm a bit stunned they allowed this subsidy to an area already served by Comcast. There are bunch of other locations in the state without any high-speed access and have to rely to satellite internet if they can afford it. I assume they also served the rural areas around Springfield but still.

I can tell a ton of people here have big issues with the government subsidies for rural areas, but I think this is thousands of times better then the inefficiencies in some cases.

Despite the fact that providing fiber to rural areas is hugely inefficient, I think that it's far better to have a program like this that provides a fair bit of futureproofing as opposed to AT&Ts program.

The problem with this program, is it relies on the idea that the subsidies are going to keep rolling in.

AT&T/Comcast/Google/etc would still be able to provide service without subsidies. Would V-Tel?

Comcast will most likely be rolling out 1Gbps anyways due to competition from Google and will be able to do so without subsidy.

Having worked for a company that made computer equipment for cable companies, my guess is that most of them would rather pay lawyers to prevent Google from coming in and ruining the show. Competition is something they do grudgingly, and only when they can't prevent it through bribing local politicians (legally) or lawsuits.

That and Google doesn't strike me as being interested in more than the couple of test markets they have already started. I'd be surprised if they announced a major initiative to roll out fiber in larger areas or more than one moderately-sized city at a time. It's expensive, and what are they really getting out if it?

Now, I'd like to know exactly how other countries are doing it, such as Hong Kong. Are they reliant on massive subsidies? Is it being rolled out with all of the new construction?

I'd say that here in the US we'd probably be better served in our telecom in general with more competition. Get rid of local monopolies, or split them into the monopoly that installs and services the infrastructure, and the competitors that serve the content (for TV) and handle billing.

Except you're paying for it whether you live in Vermont or not. That's a bit scummy if you ask me.

That's what you get when you have two senators for 650K people. For what it's worth, we didn't have Comcast service available until long after the grant money was, um, granted.

I've had VTel DSL for 12 years, though. We were upgraded to 25Mb/s sometime in the mid-aughts and got our Gigabit panel mounted last month. They're supposed to be coming back with the modem in a few weeks.

Interestingly, I also used to live in Okemos, Michigan where we had 10MB/s cable modems in 1995 as part of a TCI pilot program. Just lucky, I guess.

paying telecom taxes so the federal government can give that money to a rural provider who gives their customers super fast broadband for way less than it actually costs because those of us with crappy broadband are subsidizing it.

Yes, we have this strange idea in this country that people shouldn't be left out just because they live in a rural area. See rural electrification, rural free delivery of mail, and long-standing subsidies to telcos that offer service in sparsely populated areas.

In any event, the subscribers are clearly paying enough to cover the operating expenses of the network and bandwidth. The expensive part is putting it in the ground, which is precisely what we should be subsidizing. Sadly, last time we did that, nobody bothered to make sure the telcos who received billions of dollars to put fiber in the ground actually did so or actually used it for consumer service. Thankfully, the ARRA money did have appropriate strings attached and is, at least in this case, getting used precisely how it was meant to be used.

I can tell a ton of people here have big issues with the government subsidies for rural areas, but I think this is thousands of times better then the inefficiencies in some cases.

Despite the fact that providing fiber to rural areas is hugely inefficient, I think that it's far better to have a program like this that provides a fair bit of futureproofing as opposed to AT&Ts program.

The problem with this program, is it relies on the idea that the subsidies are going to keep rolling in.

AT&T/Comcast/Google/etc would still be able to provide service without subsidies. Would V-Tel?

Comcast will most likely be rolling out 1Gbps anyways due to competition from Google and will be able to do so without subsidy.

Having worked for a company that made computer equipment for cable companies, my guess is that most of them would rather pay lawyers to prevent Google from coming in and ruining the show. Competition is something they do grudgingly, and only when they can't prevent it through bribing local politicians (legally) or lawsuits.

That and Google doesn't strike me as being interested in more than the couple of test markets they have already started. I'd be surprised if they announced a major initiative to roll out fiber in larger areas or more than one moderately-sized city at a time. It's expensive, and what are they really getting out if it?

Now, I'd like to know exactly how other countries are doing it, such as Hong Kong. Are they reliant on massive subsidies? Is it being rolled out with all of the new construction?

I'd say that here in the US we'd probably be better served in our telecom in general with more competition. Get rid of local monopolies, or split them into the monopoly that installs and services the infrastructure, and the competitors that serve the content (for TV) and handle billing.

Hong Kong is a highly dense (16,576 people per sq mi) special administrative region of China. It also has a high economic activity. I doubt they need special incentives to provide good internet connections.

Countries that have good broadband connections usually have a lot of government regulation to prevent monopolies and increment competitivity and provide infraestructure, or are small and dense enough to not need the intervention. Big investments in infraestructure to provide good service is a barrier of entry for other smaller competitors, reducing their ability to compete and hence, preventing capitalism to do it's job in the benefit of consumers.

I've been a VTel customer since I bought my house in 2001. They were the first company in SE Vermont to offer DSL. They regularly bumped DSL speeds as they upgraded infrastructure. They replace modems when lighting strikes damage them. It is easy to get a real person on the phone and not get lost in a phone tree.

Even if they *weren't* offering Gigabit fiber, I'd be a happy customer. That they are is just icing on the cake. AT&T, Comcast, and Verizon could learn a lot about customer support and service from VTel.

I can tell a ton of people here have big issues with the government subsidies for rural areas, but I think this is thousands of times better then the inefficiencies in some cases.

Despite the fact that providing fiber to rural areas is hugely inefficient, I think that it's far better to have a program like this that provides a fair bit of futureproofing as opposed to AT&Ts program.

The problem with this program, is it relies on the idea that the subsidies are going to keep rolling in.

AT&T/Comcast/Google/etc would still be able to provide service without subsidies. Would V-Tel?

Comcast will most likely be rolling out 1Gbps anyways due to competition from Google and will be able to do so without subsidy.

The monthly bill should not be based on a subsidy, but obviously is from the article due to the phone line bundling. Subsidy rolling out the connection sure, but the monthly bill should be fair and reasonable. I pay $70 a month for 50/10 in a community 3 times the size of the VT one mentioned in the article from the local ISP. Which is a great deal based on seeing what people have to deal with in bigger cities limited to bigger telcos. They raised prices $2 at a time every 2 years it seems but nothing to go overboard about.